19 European Defence: implementation
road map
| Committee's assessment
| Politically important |
| Committee's decision | Not cleared from scrutiny; Opinion sought from Defence Committee
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| Document details | Commission Report: Defence Implementation Roadmap towards a more competitive and efficient defence and security sector: (36180), 11358/14, COM(14) 387
|
| Legal base | —
|
| Department | Ministry of Defence
|
Summary and Committee's conclusions
19.1 This Commission Report sets out a high-level
roadmap for implementing activities proposed in its July 2013
Communication Towards a more competitive and efficient defence
and security sector. That Commission Communication was part
of the preparations for the December 2013 "Defence"
European Council: the first for five years on the EU's Common
Security and Defence Policy (CSDP), it was designed for Heads
of State and Government to review and agree its strategic direction
over the next few years.
19.2 The stated overall aim of the report is to make
the defence and security sector more efficient and strengthen
the EU's CSDP. The Commission takes the European Council Conclusions
as the basis to pursue the following objectives:
· an Internal Market for Defence where European
companies can operate freely and without discrimination in all
Member States;
· an EU-wide security of supply regime where
armed forces can be sure to be sufficiently supplied in all circumstances,
no matter in which Member State their suppliers are established;
· a Preparatory Action on CSDP-related research
to explore the potential of a European research programme which,
in the future, may cover both security and defence; this is in
addition to exploiting all possible synergies between existing
civil and defence research; and
· an industrial policy that fosters the
competitiveness of European defence industries and helps to deliver
at affordable prices all the capabilities Europe needs to guarantee
its security.
19.3 The Roadmap sets out the Commission's approach,
and puts forward "deliverables", under seven main headings:
Internal Market; Promoting a more competitive defence industry;
Exploiting dual-use potential of research and reinforcing innovation;
Development of capabilities; Space and defence; Application of
EU energy policies and support instruments in the defence sector;
and Strengthening the international dimension.
19.4 The Commission undertakes to co-operate closely
with Member States, the European External Action Service (EEAS)
and the European Defence Agency (EDA), and consult widely with
industry and other relevant stakeholders, in order to develop
further and implement the actions contained within the roadmap,
prior to a Council review of progress in June 2015.
19.5 The Minister for International Security Strategy
(Dr Andrew Murrison) says that, thanks to close working with other
Member States and industry lobbying, the Commission has taken
a more cautious approach than might have been the case, with proposals
within the roadmap being generally at a high level with the detail
still to be developed, which he finds encouraging. He finds potential
benefits to defence in a number of areas; identifies other areas
with potential benefits, but where action needs to be managed
carefully; and notes yet other areas that "continue to pose
some risk to the UK" and where he will "continue to
take a robust line". These latter include proposals to clarify
certain exclusions from the scope of the Directive (Government
to Government sales and international arrangements/organisations),
where he is concerned that Commission "guidance" may
"limit our ability to procure the best capability for our
armed forces or undermine the transatlantic relationship".
He also continues to question the evidence for a Green Paper on
the control of defence industrial capabilities and to believe
there should be no new legislation; and says that he will continue
to make it clear that export policy "is a matter of national
sovereignty and that we would not want to see the Commission involved
in Member States own export campaigns". Going forward, he
will "continue to be proactive" in working closely with
the Commission, other Member States, the EDA and industry "to
resist the areas we consider to be risks", including any
actions that "could potentially cross the UK red line on
no EU ownership of capabilities (although the Commission has assured
us that this is not its intention)"; and will remain fully
engaged in the debate at expert, official and ministerial level
"to shape development of the actions to deliver benefit for
the UK and to ensure that there is no extension of competence
on the part of the Commission." Indications to date are that
"the Commission welcomes this engagement and will continue
to seek our views and expertise as this work is taken forwards."
19.6 As detailed in the main part of our Report,
the precursor Commission Communication was one of a trio of documents
that set the scene for a particularly important European Council,
all of which raised sufficient areas of concern to warrant being
debated.
19.7 In this instance, though the Minister declares
himself encouraged by the approach being taken by the Commission
as it begins the follow-through process, it appears that there
are still a significant number of areas that could go in the wrong
direction, notwithstanding the Minister's best endeavours. We
are accordingly minded to recommend that the Commission report
be debated in European Committee.
19.8 Before so recommending, however, we should
be grateful for the Opinion of the Defence Committee on the Commission's
approach and the "deliverables" it sets out in its Roadmap.
19.9 In the meantime, we shall retain the document
under scrutiny.
Full
details of the documents:
Commission Report: A New Deal for European Defence Implementation
Roadmap for Communication COM(13) 542; Towards a more competitive
and efficient defence and security sector: (36180) 11358/14:
COM(14) 387.
Background
19.10 The July 2013 Commission Communication, Towards
a more competitive and efficient defence and security sector,
proposed a number of high-level actions on its part to improve
the competitiveness of the EDTIB. That July 2013 Communication
plus separate reports from the EU High Representative (HR) Baroness
Ashton, on the EEAS and on the EU's "Comprehensive Approach"
to conflict prevention, crisis management and stabilisation prepared
the ground for the December 2013 "Defence" European
Council. The first for five years on the EU's CSDP, it was designed
for Heads of State and Government to review and agree its strategic
direction over the next few years.
19.11 Subject to the Council discussion, the Commission
intended to create a detailed roadmap with concrete actions and
timelines, in conjunction with the EDA and the EEAS.
19.12 The actions listed in the Communication included:
ensuring the full application of the existing Directives on defence
and sensitive security procurement (2009/81/EC) and on intra-EU
defence transfers (2009/43/EC); developing hybrid standards to
benefit security and defence markets; supporting defence SMEs;
and exploiting civil-military research synergies. The Communication
also proposed to assess the possibility of EU-owned dual-use capabilities
and to consider supporting a preparatory action for CSDP-related
research. The Communication also argued for increased cooperation
and more efficient use of resources among Member States to compensate
for budgetary constraints and to ensure that defence capabilities
were maintained and developed in order to meet current and future
requirements.
19.13 When he submitted it for scrutiny a year ago,
the Minister said that many proposals were consistent with the
Government's growth agenda. But the Government had made it clear
to the Commission that it would oppose any measures by the EU
to develop and, particularly, to own high-end military or dual-use
capabilities such as Remotely Piloted Air Systems (RPAS), high-resolution
satellite imagery or military satellite communication equipment;
any "proposal for which capability needs, if any, could
best be fulfilled by assets directly purchased, owned and operated
by the Union" was "red line" for the Government,
who did not believe that there was, or should be, a role for the
EU in this area.
19.14 The Government also wished not to see the Commission
involved in external market matters; was concerned over the potential
for duplication of effort, including in areas where
the Minister considered that Member States, NATO or EDA currently
had the lead; and also concerned about the implication in some
proposals of unnecessary regulatory interference in the defence
market.[89]
19.15 The European Council adopted eleven pages of
Conclusions, at the end of which it invited "the Council,
the Commission, the High Representative, the European Defence
Agency and the Member States, within their respective spheres
of competence, to take determined and verifiable steps to implement
the orientations set out" therein and said that it would
"assess concrete progress on all issues in June 2015 and
provide further guidance, on the basis of a report from the Council
drawing on inputs from the Commission, the High Representative
and the European Defence Agency."[90]
19.16 This being the first European Council discussion
of this topic since the Lisbon Treaty came into being, we first
sought the Opinion of the Defence Committee on the Commission
Communication and then recommended a debate prior to the European
Council, and for it to be on the floor of the House.[91]
19.17 In the event, it was debated in European Committee
B on 13 March 2014, along with the HR's Report on the EU's Comprehensive
Approach. In explaining the reasons for its recommendation, a
member of this Committee:
— noted that in his
Written Statement of 6 January, the Prime Minister said: "The
conclusions of the European Council are clear that nations, not
the EU institutions, are in the driving seat of defence and must
remain there";[92]
— also noted that,
when the Munich Security Conference on 1 February, the President
of the European Council, Herman von Rompuy nonetheless said:
"When it comes to defence, we know we will
need to do more with less. European countries have security responsibilities
to fulfil ... and they need the means. Starting this year, Europeans
will be launching new joint defence programmes, for cutting-edge
drones, satellite communication, cyber defence and air-to-air
refuelling. It is the start of a process. All these tools: at
the service of Europe's interests and security";[93]
— and observed in conclusion that, while
who is in "the driving seat" was moot, the direction
of travel was clear, as set out in the Lisbon Treaty: "the
common security and defence policy shall include the progressive
framing of a common Union defence policy. This will lead to a
common defence, when the European Council, acting unanimously,
so decides".
19.18 At the end of the debate, the European Committee
resolved:
"That the Committee takes note of Unnumbered
European Union Document, the High Representative's Report on the
Common Security and Defence Policy ahead of the December 2013
European Council Discussion on Defence, and European Union Document
No. 12773/13 and Addendum, a Commission Communication: Towards
a more competitive and efficient defence and security sector;
agrees that the EU should complement NATO, which remains the bedrock
of national defence; and shares the Government's view that defence
cooperation and capability development should be driven by the
nations of Europe, whether they be EU Member States, NATO allies
or both."[94]
The Commission report
19.19 The Commission takes the European Council Conclusions
as the basis to pursue the following objectives:
· an Internal Market for Defence where European
companies can operate freely and without discrimination in all
Member States;
· an EU-wide security of supply regime where
armed forces can be sure to be sufficiently supplied in all circumstances
no matter in which Member State their suppliers are established;
· a Preparatory Action on CSDP-related research
to explore the potential of a European research programme, which,
in the future, may cover both security and defence; this is in
addition to exploiting all possible synergies between existing
civil and defence research; and
· an industrial policy that fosters the
competitiveness of European defence industries and helps to deliver
at affordable prices all the capabilities Europe needs to guarantee
its security.
19.20 To pursue these objectives, the Commission
report establishes a roadmap for the activities set out in the
Communication. The Commission says that it includes a broad variety
of actions from different policies, which are nevertheless often
interrelated: improving security of supply between Member States,
for example, will facilitate cross-border market access for defence
companies; better standardisation will foster interoperability
and market openness; common certification will reduce costs and
enhance industry's competiveness, etc. Taken together, the Commission
says that all these actions will contribute to making the European
defence and security sector more efficient and thereby strengthen
the Union's CSDP. Both for the development and the implementation
of these actions the Commission will cooperate closely with Member
States, the EEAS and the EDA. This includes regular meetings at
strategic level to follow the implementation of the roadmap as
whole, and consultations at technical level for specific actions.
In parallel, the Commission will continue to inform Member States
regularly via relevant Council bodies, Defence Policy Directors
and the EDA. The European Parliament and industry will also be
consulted on a regular basis.
19.21 The Commission notes that the European Council
recognised the need for greater European defence co-operation,
in full complementarity with NATO; and says that:
"Through the implementation of the Communication,
the Commission will contribute to a robust industrial foundation
for this co-operation".
19.22 The Commission then sets out its approach,
and puts forward "deliverables", under seven main headings:
— Internal Market;
— Promoting a more competitive defence
industry;
— Exploiting dual-use potential of research
and reinforcing innovation;
— Development of capabilities;
— Space and defence;
— Application of EU energy policies and
support instruments in the defence sector; and
— Strengthening the international dimension.
19.23 Within this broad framework, the Commission
will monitor defence and security procurement, in preparation
for the report it has to produce by August 2016 on the Defence
Procurement Directive 2009/81/EC. It will continue its fact-finding
work on government-to-government sales, and work towards the rapid
phasing-out of offsets. In cooperation with the EU High Representative
and the EDA, it will produce a further Roadmap, on a comprehensive
EU-wide Security of Supply regime. It will propose further measures
to strengthen implementation of the Defence Transfers Directive
2009/43, noting that a "European approach" may be needed
"to deepen the Internal Market… [and] to ensure an appropriate
level of European autonomy in defence": with this in mind,
it will issue by the end of this year a Green Paper on "possible
shortfalls of the current system and explore options for EU-wide
action", involving "stakeholders from the very beginning".
The Commission will also support the EDA in developing a common
approach to standardisation and certification, "in agreement
with Member States taking full account of national sovereignty
and ensuring no duplication with NATO". The Commission will
put in place measures to support SMEs and Strategic Clusters.
19.24 With regard to exploiting dual-use potential
of research and reinforcing innovation, the Commission will
initiate a Preparatory Action (PA). The purpose of a PA is to
illustrate the value added of an EU contribution in new research
areas — complementing the CSDP-related civilian research
ongoing under Horizon 2020. The PA will last for a maximum of
three years. If successful, this PA would prepare the ground for
a possible CSDP-related research theme which could be funded under
the next multi-annual financial framework. While this "cannot
substitute for national investment in defence R&D", it
should "promote synergies with national research efforts
and encourage industrial co-operation". The scope of the
PA will be defined in consultation with Member States, the European
Parliament, EDA, EEAS and industry. A successful PA "will
need to recognise the specificities of defence-related research
including: research areas and models, intellectual property rights,
confidentiality of results, co-funding and rules of participation,
the role of Member States, while ensuring attractiveness for industry
participation". The question of governance "will be
a central issue". The Commission believes that these principles
and specific issues related to the PA could be considered by an
independent advisory body made up of top level decision-makers
and experts: such a "Group of Personalities" would consist
of around 20 high level representatives from Member States, the
European Parliament, the industry and academia.
19.25 In conclusion, the Commission says:
"While it remains difficult to predict what
the European defence and security sector will look like in the
next 20 to 30 years it is clear that the industrial landscape
is changing. Defence activities will continue to have its specificities,
but civil elements will become increasingly important for the
sector. This trend makes many of the Commission's policies even
more relevant for defence and offers opportunities for new synergies
and greater efficiency which Europe should not miss."
The Government's view
19.26 In his Explanatory Memorandum of 15 July 2014,
the Minister says that the Government has worked bilaterally and
with its LoI[95]
partners to seek to influence the preparation of the roadmap
in line with UK policy, both at ministerial and official level.
19.27 He notes in particular that the MOD Minister
for Defence Equipment and Support (Mr Philip Dunne), played a
key role (including giving a speech) on a panel at the 4 March
Commission high-level conference on implementation of its Communication.
In addition, the European defence industry has lobbied strongly.
As a result, the Minister says:
"the Commission has taken a more cautious
approach than might have been the case, which is encouraging.
Proposals within the roadmap are generally at a high level with
the detail still to be developed and the Commission intends to
hold more consultation."
19.28 The Minister sees potential benefits to defence
in a number of areas, including the following, and welcomes action
accordingly:
· "Efforts to encourage the defence
industry to take advantage of existing EU funding mechanisms available
to other high technology industries such as EU Structural Funds
(although actual sums involved may not be substantial);
· "Monitoring to ensure the phasing
out of offsets across the EU;
· "Support of defence SMEs such as
the new Commission SME fund (COSME) and the creation of cross-border
clusters; and
· "Increasing the synergies between
the EU civil research programme and defence research."
19.29 The Minister then notes other areas where he
sees potential benefits, but where he says "action needs
to be managed carefully", such as:
· "The roadmap for a comprehensive
EU-wide Security of Supply regime where we support efforts to
improve confidence in cross-border trade, particularly better
use of the Intra-Community Transfers Directive, but would not
support new regulation or any action that would constrain UK ability
to veto exports or imply European protectionism; and
· "The CSDP-related Preparatory Action,
where we need to be fully engaged in scoping this action to ensure
our national security interests are protected as well as ensuring
that the IPR is owned by industry rather than the Commission."
19.30 The Minister highlights yet other areas that
"continue to pose some risk to the UK and where we will continue
to take a robust line", which he says include:
· "Proposals to clarify certain exclusions
from the scope of the Directive (Government to Government sales
and international arrangements/ organisations), where we are concerned
that the Commission 'guidance' may limit our ability to procure
the best capability for our armed forces or undermine the transatlantic
relationship;
· "[the] Green paper on the control
of defence industrial capabilities where we continue to question
the evidence and believe there should be no new legislation; and
· "Commission action in third markets.
We will continue to make it clear that export policy is a matter
of national sovereignty and that we would not want to see the
Commission involved in Member States own export campaigns."
19.31 The Minister notes that there are no immediate
financial implications:
"although the impact of any Commission action
being taken forward would have to be quantified. It should be
noted that no new money should be expected to be made available
by the Commission for industry as a result of the proposals within
the Report."
19.32 Looking ahead, the Minister says the Commission
will provide a progress update at the Council Meeting in June
2015; and that in the lead up to this discussion the Government:
"intends to work with Member States and
the Commission to ensure that our areas of concern are properly
addressed, and that UK interests are fully taken into account
when taking forward any of these actions.
"We will continue to be proactive in working
closely with the Commission, other Member States, the European
Defence Agency (EDA) and industry to resist the areas we consider
to be risks, including any actions that could potentially cross
the UK red line on no EU ownership of capabilities (although the
Commission has assured us that this is not its intention). We
will remain fully engaged in the debate at expert, official and
ministerial level to shape development of the actions to deliver
benefit for the UK and to ensure that there is no extension of
competence on the part of the Commission. Indications to date
are that the Commission welcomes this engagement and will continue
to seek our views and expertise as this work is taken forwards."
Previous Committee Reports
None; but see Twenty-seventh Report HC 83-xxiv (2013-14),
chapter 5 (11 December 2013); Twenty-second Report HC 83-xx
(2013-14), chapter 14 (6 November 2013); and Thirteenth
Report HC 83-xiii (2013-14), chapter 23 (4 September 2013).
89 See Thirteenth Report HC 83-xiii (2013-14), chapter 23
(4 September 2013). Back
90
See http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/140245.pdf Back
91
For the Committee's further consideration of the Commission Communication,
see Twenty-seventh Report HC 83-xxiv (2013-14), chapter 5 (11
December 2013) and Twenty-second Report HC 83-xx (2013-14), chapter 14
(6 November 2013). Back
92
See HC Deb, 6 Jan 2014, Col 7 WS. Back
93
See http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/140883.pdf,
p 3. Back
94
See Stg Co Deb, European Committee B, Common Security
and Defence Policy, 14 March 2014, cols 3-24. Back
95
France, Germany, Italy, Spain and Sweden. The Letter of
Intent (LoI) Framework Agreement Treaty was established on 27
July 2000, to create the necessary measures to facilitate the
restructuring of the European defence industry. It aimed to create
the political and legal framework necessary to facilitate industrial
restructuring in order to promote a more competitive and robust
European Defence Technological and Industrial Base (EDTIB) in
the global defence market. The Framework Agreement is an inter-governmental
treaty and is not an EU institution. It does not have an office,
secretariat or budget and relies on the parties to agree and deliver
the work programmes. It was one of the first examples of closer
European co-operation in the armaments field. See https://www.gov.uk/letter-of-intent-restructuring-the-european-defence-industry
for full information. Back
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